EMC (EMC) Jumps After Reporting Significantly Higher Earnings
Shares of EMC Corp. (EMC: Charts, News) rose +1.70 or +7.25% to $25.14 per share on Tuesday after the company reported a 32 percent increase in fourth quarter earnings. The record rise in earnings was due in part to increasing demand for digital data fuels purchases of storage equipment and software from VMware, of which EMC holds a majority interest.
EMC is the world's largest manufacturer of storage computers. The company has been actively acquiring companies such as Data Domain, Greenplum and Isilon, in addition to a controlling interest in VMware (VMW
), which have complemented the company's focus on the digital storage and backup market. VMware stock was also up strongly on Tuesday, rising +7.7 percent to close at $92.66 per share. Hopkinton, Massachusetts based EMC's results for Q4 and for the full year of 2011 were the best on record as far as quarterly consolidated revenue, net income and EPS. Both operating cash flows and free cash flows hit an all-time record, on a Generally Accepted Accounting Principle or GAAP and on a non-GAAP basis. Daily Chart
EMC reported net income had risen to $832 million, or 38 cents per share, compared to $628.6 million or 29 cents per share for Q4 of 2010. With the exclusion of some items, EMC's profit was 49 cents per share, which was an increase of 17 percent compared to Q4 2010. This compares to a Bloomberg's analyst survey, where the average consensus was for a profit of 46 cents per share. Also, sales for the company increased by 14 percent to $5.57 billion, which also beat analyst expectations of sales of $5.49 billion. For the entire year of 2011, consolidated revenue was $20 billion, which was an increase of 18 percent over last year's results. Overall, non-GAAP net income for fiscal 2011 was $2.5 billion, or 30 percent higher than Q4 2010. After the earnings release, EMC Chairman and Chief Executive Officer, Joe Tucci stated that "EMC had a strong and record-breaking 2011. There's no doubt that cloud computing is completely transforming the IT industry and that Big Data promises to have a similarly profound effect on transforming the way we work and live. Our customers and partners have these transformations in their sights and are embracing EMC's vision, strategy and best-of-breed portfolio to capitalize on them and realize the full potential of their information assets." As a result of continuing innovations in digital storage technology and cloud computing, EMC's forecast for revenue in 2012 was $22 billion, which is in line with analyst expectations. The company's estimate for adjusted earnings in 2012 is $1.70 per share or a just a penny under the average estimate. VMware, of which EMC holds a controlling interest, is the largest maker of software that allows computers to run multiple operating systems. VMware also reported better than expected earnings on Monday. The rise was due in part from companies purchasing software programs to make their servers more efficient. With growing demand for digital storage and software solutions, EMC may continue exceeding analyst expectations in 2012. Other News About EMC EMC Reports Record Fourth-Quarter and Full-Year Revenue and Profit
EMC's press release on earnings. EMC, Western Digital, Chips Lift Techs
Fox news article on technology stocks. Other Stocks in the News Apple earnings: $97.6 billion in the bank, and other highlights
Stock soars in after hours trading. At Yahoo, the Ad Decline Continues
New Yahoo CEO looks to turn around core business. Copyright 2011 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.
Published on Jan 25, 2012
By Jay Hawk